Lookahead Ltd. produces and sells a single product. Sales budget for the current calendar year by quarter is as under:

The year is expected to open with an inventory of 4,000 units of finished product and close with an inventory of 6,500 units. Production is customarily scheduled to provide for two-thirds of the current quarter’s sales demand plus one-third of the following quarter’s demand. The standard cost details for one unit of the product is as follows:
Direct material, 1 lb @ Rs 5 paise per lb Direct labour, 12 minutes @ ₹30 per hour Variable overheads, 12 minutes @ ₹7.5 per hour Fixed overheads, Rs 1,80,000are to be shared equally among 4 quarters.
(i) Prepare a production budget, by quarters, showing the number of units to be produced and the total costs of direct material, direct labour, variable overheads, and fixed overheads.
(ii) If the budgeted selling price per unit is ₹17, what would be the budgeted profit for the year as a whole?
(iii) In which quarter of the year is the company expected to break-even?

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12,000 15,000 16,500 18,000 Quarter I Units to be sold -==> IV